Since January, companies across the board have been laying people off and blaming it on artificial intelligence. From Meta to IBM, big names are cutting jobs in the name of efficiency. What’s really going on is cost-cutting with little thought about the long-term impact.

AI is changing how work gets done, no doubt. But getting rid of people just because a new tool exists isn’t a smart move. It’s short-sighted, and it’s going to cause problems later.

AI Layoffs Stats 2025: Who Got Hit and Why

Here’s a quick rundown of some of the big AI-related layoffs this year:

  • Ocado let go of 500 workers in February to make things more efficient with AI.
  • Salesforce laid off 1,000 folks as part of their money-saving efforts linked to AI.
  • Meta cut 5% of its workforce in January to focus more on AI.
  • Microsoft laid off 6,000 people during a reorg driven by AI.
  • Chegg dropped 22% of its staff because demand dropped and more students turned to AI tools.
  • Business Insider let go of 21% of their team as web traffic fell and they leaned more on AI content.
  • IBM got rid of 8,000 HR roles and swapped them for AI systems, showing a bigger trend towards automation in HR.

It all comes down to two words: efficiency and cost. The idea is that AI can handle a lot more work faster and doesn’t need a paycheck, benefits, or time off. But there’s a larger price tag being overlooked.

What’s Getting Lost: Institutional Knowledge Loss in the Wake of AI

When companies say goodbye to their seasoned employees, they are not just losing a warm body in a chair. They lose knowledge that takes years to build.

That includes:

  • Knowing who to contact to move a project forward
  • Understanding how to work around system flaws
  • Navigating internal processes that aren’t written down
  • Building relationships that smooth out rough patches

You can’t teach this in a week. You can’t replace it with software. When someone with five years or more at a company walks out the door, they take all that know-how with them. When the company tries to bounce back later, there’s no one left who remembers how things worked. That’s not efficient. That’s costly.

AI Workforce Impact: Smarter Options Than Layoffs

There are better ways to handle change than cutting staff every time a new tool comes out. Companies should ask:

  • Can the employee learn new skills? Many people have more than one strength. Someone in admin might also take care of project management or handle internal communications.
  • Can the job change? If AI takes on the routine stuff, it frees up the employee to work on more important tasks.
  • Are we really saving money? Swapping out experienced workers means longer training periods, more errors, and slower progress.

AI should be a helpful tool and not a reason to let people go. The real value comes from keeping your team intact and giving them better resources instead of starting fresh every time something new pops up.

The Future of Work and AI

AI might help save some time and money in the short run, but it can’t replace experience or human judgment. If companies keep chasing after efficiency without thinking about the bigger picture such as how your employees can add additional value to their organization, they will end up losing more than they gain. Those savings now could end up costing a lot more down the line.